Closure of Marsden Point oil refinery set to cost 240 jobs

Monday, 5 July 2021

Energy Minister Megan Woods says stopping refining won't increase fuel supply risks.

Shareholders in Refining NZ will vote on August 6 on whether to close the country’s only refinery, at Marsden Point in Northland, and switch instead to importing pre-refined fuels.

Refining NZ said the change would result in the number of staff it employed falling by 240 over two years, which would leave the company with 60 employees.

Unions have warned hundreds more jobs will be lost among contractors and suppliers.

Refining NZ chief executive Naomi James said it was necessary to end refining “as a result of the most difficult circumstances we have faced in 60 years of operating”.

If all goes to plan, the refinery will close around the middle of next year.

* Plan to quit refining at Marsden Point could happen next year

The site where the Marsden Point oil refinery now stands has “huge potential” for other uses, says Refining NZ chairman Simon Allen.

* Refining NZ sends out further signals Marsden Point oil refinery may close

* Refinery closure would cost 1000 Northland jobs and push up fuel prices, says union

James said a key focus for the company would be supporting its employees and their families, and working closely with the local community “to help lessen the impacts of this change”.

She indicated competition from larger and more efficient refineries in Asia had been a factor, as well as “significant increases in electricity and gas costs”.

The Marsden Point refinery is believed to consume about 5 per cent of the country’s natural gas supply.

The result of the shareholder vote appears a foregone conclusion.

Z Energy and BP, which together own just over 25 per cent of Refining NZ, have agreed in principle to the import model.

Discussions are still continuing with Mobil, which holds a 17 per cent stake in Refining NZ, but it is not understood to be lobbying for refining to continue.

E tū union spokeswoman Amy Baker said it was supporting its members and could not provide further comment at the moment.

Energy Minister Megan Woods played down the consequences of the end to refining on the country’s fuel security last month, telling a select committee that even with the refinery open, Refining NZ still had to import crude oil.

Refining NZ chairman Simon Allen said the site where the refinery currently sits had “huge potential” for other uses as it had “deep water port access, large electricity and gas connections, a very capable workforce and proximity to the largest population base in New Zealand”.

“We are exploring what the best opportunities are for the remainder of our site as we move forward,” he said.

Refining NZ shares were trading up 1 cent at 68c after the announcement, valuing the company at $213 million.

The company advised shareholders that an end to refining would allow it to resume paying dividends one to two years after it switched to importing refined fuels.